DALUWATTE v. PREMALATHA

031-SLLR-SLLR-1998-1-DALUWATTE-v.-PREMALATHA.pdf


260
Sri Lanka Law Reports
(1998) 1 Sri LR.
DALUWATTE
v.PREMALATHA
SUPREME COURTG. P. S. DE SILVA, CJ.,
WIJETUNGA, J. ANDGUNASEKERA, J.
S.C. APPEAL NO. 30/95
A. NO. 738/92 (F)
C. HAMBANTOTA CASE NO. 156/REFEBRUARY 2ND, MARCH 19TH, 1998.
Rent and ejectment – Excepted premises – Regulation 3 in the schedule to theRent Act.
The plaintiff sought to eject the defendant from a distinct and separate unit occupiedby her for very many years and separately assessed prior to 1.1.1968. Havingregard to the annual value the premises occupied by the defendant were ‘rentcontrolled'. On 1.1.1968 the local authority ‘consolidated* the defendant's unitwith two other distinct units – one let to one Jamis, the other occupied by theplaintiff herself, each of which was also separately assessed prior to 1.1.1968and 'rent controlled", being below the annual value of Rs. 1,000/-. The ‘consoli-dated' unit was assessed at Rs. 1,338/- which was the value that made anypremises ‘excepted premises' in terms of regulation 3 in the schedule to the RentAct. However, there was no physical or structural alterations whatsoever to theunits and they continued to remain distinct and separate.
Held:
The assessment of the entire premises after consolidation of the three premiseshad no application to the premises occupied by the defendant and from whichthe plaintiff sought to eject the defendant.
Cases referred to:
Ansar v. Hussain C.A.LR. (1986) vol. I – 365.
Hewavitharana v. Ratnapala (1988) 1 Sri LR 240.
Plate Ltd. v. Ceylon Theaters Ltd., 75 NLR 128.
Weerasena v. Perera (1991) 1 Sri LR 121, 126.
APPEAL from the judgment of the Court of Appeal.
P. A D. Samarasekera, PC with Keerthi Sri Gunawardena for the plaintiff-appellant.
sc
Daluwatte v. Premalatha (G. P. S. de Silva, CJ.)
261
Faisz Musthapha, PC with W. Dayaratne and M. S. M. Suhaid for the defendant-respondent.
Cur. adv. vult
April 03, 1998.
G. P. S. DE SILVA, CJ.
The plaintiff instituted these proceedings against the defendant whowas her tenant seeking, inter alia, to eject her from premises bearingassessment No. 10, Kirinda Road, Tissamaharamaya. The action wasfiled on 08.12.87. The basis of the action was that the premises insuit were "excepted premises" within the meaning of regulation 3 ofthe "Regulations as to Excepted Premises" set out in the scheduleto the Rent Act. The plaintiff pleaded, inter alia, that the premiseswere business premises situated within the local limits of the TownCouncil of Tissamaharamaya; the annual value of the premises ason 1.1.68 exceeded Rs. 1,000/-; that the premises were accordingly"excepted premises" within the meaning of the Rent Act. The defend-ant in her answer denied the plaintiffs claim and took up the positionthat the premises were not "excepted premises"' and further pleadedthat the annual value of the premises was only Rs. 777/-.
At the conclusion of the trial the District Court held that the premiseswere not "excepted premises" and dismissed the plaintiffs action. Theplaintiffs appeal to the Court of Appeal was unsuccessful as the Courtof Appeal also took the view that the premises in suit were not“excepted premises". Hence the present appeal by the plaintiff to thiscourt.
The only question which arises for decision on this appeal iswhether the premises in suit are "excepted premises", within themeaning or the Rent Act. If the premises are "excepted premises",then the plaintiff is entitled to judgment as prayed for.
The premises consists of 3 separate units occupied by threedifferent persons. There is one boutique occupied by the defendantand another separate unit let to one Jamis; the 3rd unit was occupiedby the plaintiff herself. These three separate units had at one timeassessment numbers 68, 69 and 70 and prior to 1968 the assessmentnumbers were changed to 8, 10 and 1/10. However, on 1.1.68 the
262
Sri Lanka Law Reports
(1998) 1 Sri LR.
assessing authority "consolidated" the three separate units andassessed the entire premises as a single unit of assessment assigningthe No. 10 and specifying the annual value at Rs. 1,338/-. At thispoint it is helpful to set out the terms of regulation 3 in the scheduleto the Rent Act.
"3. Any business premises (other than premises referred toin regulation 1 or regulation 2) situated in any area specified incolumn 1 hereunder shall be excepted premises for the purposeof this Act if the annual value thereof as specified in the assessmentmade as business premises for the purpose of any rates leviedby any local authority under any written law and in force on thefirst day of January, 1968, or, where the assessment of the annualvalue thereof as business premises is made for the first time afterthe first day of January, 1968, the annual1 value as specified insuch assessment, exceeds the amounts specified in thecorresponding entry in column II:
1 11AreaAnnual Value
Town within the meaning
of the Town Councils
OrdinanceRs. 1,000
There is no dispute between the parties on the following matters:The premises presently assessed as No. 10 consisted of 3 separateand distinct units long prior to 1968. These units continued to beseparately assessed until the end of 1967 and the annual value ofeach of the units was below Rs. 1,000/-. In other words, each ofthe 3 units prior to 1.1.68 was "rent controlled" and separatelyassessed. It was only on 1.1.68 that there was a "consolidation" andthe 3 units were collectively assigned one number (No. 10).Although the assessment as on 1.1.68 specified the annual value asRs. 1,338/-. Mr. Musthapha for the defendant-respondent relevantlyemphasised that there were no physical or structural alterationswhatsoever to the three units. The units continued to remain distinctand two of the units continued to be the subject matter of two separatetenancies.
sc
Daluwatte v. Premalatha (G. P. S. da Silva, CJ.)
263
Mr. Samarasekera for the plaintiff-appellant submitted that in applyingregulation 3 of the schedule to the Rent Act the basic questions is,what is the relevant annual value that must be taken into account?Mr. Samarasekera contended that in answering this question the courthas to first consider whether the premises were assessed on 1.1.68.If the premises were assessed on 1.1.68, the next question is whetherthe annual value exceeded Rs. 1,000/-. Mr. Samarasekera urged thaton the facts there is no doubt that the premises were assessed on1.1.68 and that the annual value exceeded Rs. 1,000/-. Therefore thepremises in suit were excepted premises. Mr. Samarasekera furtheremphasised that under no circumstances can the court consider anassessment made prior to 1968 as regulation 3 specifically sets outthe base year as the “1st day of January, 1968". In short, counsel’ssubmission was that when the 3 units were consolidated and assessedon 1.1.68 under No. 10, the assessment as on 1.1.68 conclusivelydecided the question whether the premises were excepted premisesor not. Since the annual value as assessed on 1.1.68 exceededRs. 1,000/- the premises were excepted premises. It was the sub-mission of Mr. Samarasekera that both the District Court and the Courtof Appeal were in error in taking into account an assessment thatexisted prior to 1968 and in ignoring the assessment as on 1.1.68.What is material is the premises assessed and not the premises letand as the premises assessed on 1.1.68 is above Rs. 1,000/-, thepremises ceased to be subject to "rent control". The pith and substanceof Mr.Samarasekera's argument was that premises No. 10, KirindaRoad, Tissamaharamaya (the premises in suit) were assessed by thelocal authority for purposes of levying rates and the annual value ason 1.1.68 was fixed at Rs. 1,338/-. Thus the premises had an annualvalue "specified" and "in force" on 1.1.68 exceeding Rs. 1,000/-. Thepremises therefore were excepted premises.
However, the present action is to eject the defendant from a distinctand separate unit occupied by her for very many years prior to 1.1.68.Besides the fact that the unit occupied by the defendant is a distinctand a separate unit, there is the all-important fact that the said unitwas separately assessed for many years prior to 1.1.68. Moreover,having regard to the annual value, the premises occupied by thedefendant were "rent controlled". It is of significance to note that whatwas assessed on 1.1.68 as excepted premises were not the premisesoccupied by the defendant. What was assessed on 1.1.68 as exceptedpremises consisted of the premises in occupation of the defendant
264
Sri Lanka Law Reports
(1998) 1 Sri LR.
as well as two other distinct units which were also separately assessedprior to 1.1.68. In other words, the local authority having "consoli-dated" three distinct and separate units assigned one number andassessed the "consolidated unit" at an annual value of Rs.1,338. Asstated earlier it is common ground (a) that there were no physicalor structural alterations whatsoever to the units; (b) the 3 unitscontinued to remain distinct and separate; (c) two of the units con-tinued to remain the subject matter of two separate tenancies. Thusit is manifest that the "consolidation" that took place on 1.1.68 waspurely a national consolidation devoid of any physical or structuralalterations which could have had an impact on the valuation andassessment. In short, the "consolidation" as on 1.1.68 did not givebirth to "new premises". Ansar v. Hussain(v; Hewavitharana v.Rathnapala®. I am therefore of the view that the Court of Appealwas correct in concluding that the assessment of the entire premisesafter consolidation of the three premises has po application to thepremises occupied by the defendant and from which premises theplaintiff seeks to eject the defendant.
Mr. Samarasekera relied strongly on the case of Plate Ltd. v.Ceylon Theaters Ltd.*31 That was a case where the issue was whetherthe occupier of a part of the premises which were admittedly exceptedpremises is entitled to claim the protection of the Rent RestrictionAct when sued in ejectment. Samarawickrema, J. said: "The schemeof the act suggests that it was intended that the criterion for decidingwhether the premises were excepted premises was to be the amountof the annual value assessed by the local authority. Once a premiseswere excepted premises on the application of that test there is nosupport to be found in the Act for the position that a part of thosepremises could be premises to which the act applied unless that partwas separately assessed“ (emphasis added). In Plate's case theportion occupied by the tenant had not been separately assessed.Therefore Plate's case can be clearly distinguished from the facts ofthe case before us for the reason that the defendant in the presentcase is in occupation of a unit which had been separately assessedand which was "rent controlled" prior to 1968.
Furthermore, Mr. Samarasekera submitted that the decision inAnsar v. Hussain (supra) and Hewavitharana (supra) have norelevance to the instant case, since those were cases concerned withthe question whether the assessment of the premises in a particular
sc
Datuwatte v. Premalatha (G. P. S. do Silva, CJ.)
265
year constituted the "first assessment" of the premises, that is, premiseswhich have been assessed for the first time after 1.1.68. But inthe case before us, counsel argued, there was an assessment inexistence and operative on 1.1.68 and is therefore a matter whichfalls within the first limb of regulation 3. In my view the approachof Wanasundera, J. to the question of "subdivision" or "consolidation”of premises is equally relevant to the present case. It is an approachwhich Mr. Musthapa rightly characterised as "sin empirical approach"which found favour with Dheeraratne, J. in Hewavitharana v. Ratnapala{supra). Refem'ng to the view taken by Wanasundera, J. in Ansar'scase (supra) Dheeraratne, J. stated in Weerasena v. Pereraf4).
“The third, (approach) is that reflected in the judgment ofWanasundera, J. in Ansar v. Hussain, a via media through whichthe court will not only look at the mere fact of a separate assess-ment, but also, at the extent and significance of the change involvedand the impact of that change on the valuation and assessmentThis last approach, commends itself to me as a safeguard bothagainst capricious assessments made by rating authorities affectingrights of parties to the letting and also against possible manipu-lations of the assessments by interested parties with intent to giveundue advantages either to landlords or to tenants. {Hewavitharanav. Rathnapala) (supra).
For these reasons the judgment of the Court of Appeal is affirmedand the appeal is dismissed with costs fixed at Rs. 1,000.
WIJETUNGA, J. – I agree.
GUNASEKERA, J. – I agree.
Appeal dismissed.